Canadian government tells regulator to back off on charging streamers like Netflix more

OTTAWA, Ontario (AP) — Canada’s government directed its television and communications regulator to back down from a recent decision to triple financial contributions required from U.S. streaming services such as Netflix for Canadian content, the country’s culture minister said Wednesday.

Instead, Culture Minister Marc Miller said, the government will invest hundreds of millions of dollars into the sector.

The U-turn comes after the Motion Picture Association, the U.S. group representing streamers, called on the Canadian Cabinet to reconsider its approach, and after the U.S. ambassador to Canada called for the policy to be rescinded.

It also comes as Canada and the United States are in discussions on whether to renew the free trade agreement between the two countries and Mexico.

The Canadian Radio-television and Telecommunications Commission — the country’s equivalent to the U.S. Federal Communications Commission — said in May it would require large streaming services like Netflix to contribute 15% of their Canadian revenues to Canadian content. It made the decision as part of its work to implement the Online Streaming Act.

Asked whether the decision is another concession to the U.S., Canadian Prime Minister Mark Carney said Wednesday the government was looking at how much the new policy would cost Canadians.

“It is another step to reinforce affordability for Canadians. This is not the time to raise the costs for Canadians,” he said.

U.S. Ambassador to Canada Pete Hoekstra welcomed the decision.

“American firms want to invest in Canada’s creative sector, and a fair, nonburdensome framework makes that possible,” Hoekstra posted on social media.

Miller, the Canadian culture minister, told reporters in Ottawa that the fact the U.S. has identified the Online Streaming Act as a trade irritant was not the only reason the government asked the CRTC, the controller, to change its course.

“We’re impatient to make sure that the (streaming) sector stays vital and stays supported, and that’s why we’re making that investment of $600 million Canadian (US$432 million) into the industry,” he said.

The reversal was met with some discontent.

Kyle Irving, chair of the board of the Canadian Media Producers Association, said in a statement that the board was still reviewing the development, but “we are concerned that the federal government has sold out Canadian culture in favor of big U.S. tech interests.”

Irving said the question that must be asked is whether U.S. streamers, who make “tens of billions” from Canadians, should be required to invest in Canadians telling Canadian stories.